GE confirms talks with Electrolux for sale of appliance division

deeageauxAugust 15, 2014

NEW YORK (AP) General Electric confirmed that it is considering the sale of its historic appliance division as part of its effort to focus on selling more complex and more profitable industrial equipment.

The confirmation came after the Swedish appliance maker Electrolux released a statement Thursday that it was in discussions to buy the business from GE, which is based in Fairfield, Connecticut.

"GE is evaluating a wide range of strategic options for our appliances business, including discussions with Electrolux and other interested parties," said GE spokesman Seth Martin.

General Electric Co. has said it plans to sell businesses worth about $4 billion this year, and the company's appliance division maker of the first electric toaster more than a century ago has been thought to be a candidate for sale.

Hope this doesn't happen just so the appliance market doesn't shrink further, but it probably will. GE was trying to sell the appliance division a decade ago but couldn't find a buyer it thought was willing to pay enough. I haven't had the sense GE really wanted to be in the appliance business, which accounts for a tiny fraction of the company's size and revenues. That despite Jeff Immelt spending 3 years in the GE appliance unit long ago.

Crowded field out there for major appliances; hard to visualize having more than 4 major players surviving, although niche markets will always exist for the brands not intent on selling millions (Miele, SQ, Viking, Sub-zero, among others).

GE as a company always want to be the number one or two player in an industry, I'm pretty sure jack welch said as much years ago. With the rise of Electrolux, LG, Samsung and others, they were just never going to get back there again.

All I can think of is the episodes of 30 Rock and how they lampooned how GE owns both NBC and an appliances division:

Jack: Attention, creative types. Brainstorming session. Lutz, try to stop mouth breathing for one minute. Uh, what is this? It's an idea. An idea that started this company, changed the way we live, and made this country great. This is Dinesh Mehta. He's a design engineer for the Microwave Division. All Dinesh and I need from you is one idea that is as good as the light bulb.
Liz: what?
Jack: I have two days to make people buy a lot of microwaves.
Frank: well, it's kind of annoying when you're microwaving, like, a burrito and the burrito won't rotate because it's too big. It just gets, you know, caught against the sides and the the tray under it rotates, but it, it doesn't rotate.
Jack: Okay, bigger ovens. Americans like big, yes. what else?
Toofer: what if microwaves broke down more easily so people would have to buy new ones more often?
Jack: Yes, shoddier, excellent. Bigger and not as well-made.
Pete: wow, that sounds exactly like the philosophy that almost destroyed the U.S. auto industry.
Jack: This isn't the auto industry, Pete. The auto industry was run by a bunch of out-of-touch white guys selling consumers a product they didn't want. we're G.E., damn it. And we're going to make a giant, flimsy microwave.
Dinesh: Frank, I can't! If I make it any bigger, the door will be too heavy.
Frank: Fine, forget it.
Jack: wait... Say that again.
Frank: I said, ''Forget it.''
Jack: ''Four, get it.'' Four smaller doors.
Toofer: Yes! we'll crack this yet.
Jack: ''wheel crack this yet.'' wheel. Put wheels on it.
Frank: Yeah!

"We have been working with an outside supplier who has just perfected stainless steel foil thanks to our input. The only problem is it loses its mirror finish between about a year, year and a half."

"But it has a shiny mirror finish, right?"

"Yes sir, it sure does."

"Cringely, Have this fine young scientist fill you in on the details and send an order to production to go ahead with the new line for making cardboard microwave ovens. Stainless steel foil and a bit of clearcoat spray should have us rakin' it in."
"Shiny, big, quick shoddy build, cheap price. Thank the lord for CAD and the millions of gullible folk called on to be our customers."

"And thank the Lord for you sir, you inspire all of us with your decisive and brilliant leadership."

"Very true, Cringely, very true indeed. That is why I get paid the big bucks, right?"

I learned from an article I read earlier today (sorry I don't remember where from or I would link it) that the main thing Electrolux is interested in from GE is their line of Louisville built french door refrigerators. In fact it is possible they may buy only this product line from GE and leave the rest.

This makes a lot of sense, as Electrolux has been having some serious quality issues with their Mexican made fridges. I know they had shipping issues a while back due to cartels, as well.

I think this is a testament to how good these new GE's are as well. I'm sure Electrolux has already disassembled, inspected, and tested these fridges extensively, and they would not be paying good money for them if they were crap.